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2014A Cushman & Wakefield Research Publication
NEW RETAIL
FRONTIERS: EMERGING
MAIN STREETS IN INDIA
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Table of ContentsEXECUTIVE SUMMARY
2WHAT IS AN EMERGING MAIN STREET?
1
3DRIVERS FOR EMERGING MAIN STREETS
4
KEY EMERGING MAIN STREETS
14ANALYSING RETAIL DYNAMICS INEMERGING MAIN STREETS
20OUTLOOK FOR THESE
EMERGING MAIN STREETS
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EXECUTIVE SUMMARY
Indian retail destinations are undergoing a metamorphosis;
established malls and main streets are becoming more
sophisticated as shopping destinations and a number of new
locations are emerging.This report delves into the potential of
such upcoming, new retail catchments and analyses each one
from a 360 degree view point. In our report, we have taken into
account the seven major cities of Mumbai, Delhi-NCR, Bengaluru,Chennai, Kolkata, Pune and Hyderabad.
The most natural reason for the emergence of new retail micro
markets is that Indian cities are now overflowing at helms,
leading to creation of new residential catchment areas. Retail
malls and main streets are perhaps the leading parameters of
social infrastructure. In a sense, this reflects the increasing
financial wherewithal of Indian consumers and their willingness
to make purchases.That said, there is no one-size-fits-all strategy
that works. Each micro market attracts a unique class of
shoppers and the main challenge of retailers is to tailormake
product mixes in order to best cater to the demand of theconsumers. For instance, High Street Phoenix in Lower Parel,
Mumbai and Phoenix Market City in Kurla, Mumbai are not and
could not be a replication of each other.Whilst the micro
market of Lower Parel can draw luxury shoppers, Kurla is
unlikely to.As is true for most real estate related business
decisions, location holds the key; structuring a business model
synchronized to the expected footfalls will be the deciding factor
of success or failure.
A specific interesting trend that we came across is that despite
global interest and international retail brands flocking to India,
foreign brands occupy insignificant space in emerging main streets
compared to domestic brands. Select main streets such as
Dwarka (Ashirwad Chowk) in Delhi NCR, NSC Bose Road in
Kolkata, and HSR Layout and Sahakar Nagar in Bengaluru have
witnessed sizeable penetration of foreign brands (above 20%
occupancy) reflecting the tastes of the catchment and the quality
of supply present here. However, main streets such as Kothapet in
Hyderabad, Kharadi in Pune and Ambattur (MTH Road) in
Chennai witnessed lesser levels of penetration from foreign
retailers. Another interesting fact is that across the main streets,
apparel and footwear brands had maximum penetration by area,
followed by the food and beverages (F&B) brands, alluding to
consumer preference when it comes to retail segments.
Emerging retail locations definitely have a cost advantage. On an
average, we estimate that rentals are 20-30% lower in these micro
markets when compared to established retail locations. Currently
Dwarka (Ashirwad Chowk) in Delhi-NCR commands the highest
main street retail rental, while Kothapet in Hyderabad commands
the lowest main street retail rental amongst the 14 new emerging
main streets.
The main factor that will drive growth potential is consumerpurchasing power and hence, a stable and confident job market is
essential. India is just coming out of a tepid job growth scenario,
which has eroded consumer confidence significantly.As Indias
macroeconomic statistics improve, people will feel more
comfortable and shop beyond their basic needs. Economic
indicators are now positive and retailers should identify and
establish bases in high-growth emerging locations and (in some
cases) benefit from first-mover advantages.
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WHAT IS AN EMERGING MAIN
STREET?
Main streets initially develop in and around city nodes such as
near transport hubs, railway stations or at the heart of the city.
As the city expands its precincts, far-flung residential areas start
developing a mixed-use fabric along the streets. Select streets
start emerging and witness progressively higher footfalls, which
then lead to concentrated retail development along these
avenues. This report takes a look at such new and emerging main
streets that have evolved in recent years due to the development
of new residential pockets or densification of certain areas.
For the purpose of the study, we have concentrated on seven
major cities of Bengaluru, Chennai, Hyderabad, Kolkata, Mumbai,
Delhi-NCR and Pune. These major cities are reeling under severe
urbanization pressures and their geographical limits are being
redrawn and extended to encompass the surging settlements. Two
new main streets, which have witnessed maximum activity level in
terms of enquiries and retail real estate transactions in last couple
of years, have been chosen from each of these cities for the study.
Post-conducting an extensive demand-supply analysis, we have
zeroed in on these new emerging main streets and will discuss
their characteristics and potential in the following sections.
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DRIVERS FOR EMERGING MAIN
STREETS
DRIVERS FOR EMERGING MAIN STREETS
URBAN SPRAWL
TRANSPORT AND ACCESSIBILITY
Main streets have traditionally evolved as a communal hub, where
a wide variety of local shops are present in the prime locations.
Today, chaotic main street shopping co-exists with organised,
hassle-free and convenient mode of shopping in malls. Indianconsumers are also exploring different retail avenues such as
online shopping with home delivery options and click and collect
centres. Though the share of these alternative formats is slowly
increasing in India, shopping destinations such as main streets and
malls maintain their appeal as new locations emerge. The major
drivers facilitating the emergence of new main streets are:
Rapid urbanization and population explosion in India have led to
the emergence of new suburbs and satellite towns with alternate
commercial areas, around which, new retail neighbourhoods have
developed.Alternative retail options have started sprouting inthese far-flung locations in order to reduce the dependence of
residents on established retail hubs situated at the heart of the
city.As populations in the city are increasing through natural
growth and migration, retailers are increasingly looking at setting
up their outlets as close as possible to their consumers in order
to ensure that their markets expand.Whilst it is usually the local
and unorganised retailers who try and capitalise on the first
mover advantage in new and emerging retail locations, organised
retailers lead the pack in setting up outlets, typically belonging in
the food and beverages (F&B), mid-range fashion and accessories.
Increasing congestion in established retail destinations has
resulted in increasing the travel time and well as the travel cost
for fuel, parking, etc. Further, increased car ownership has
resulted in an increase in demand for adequate parking facilities
for shoppers, which has been difficult to cater to in established
main streets. Consequently, new retail streets that are easily
accessible through various means of transport have good
potential to mature into established main streets.
As the retail sector is increasingly getting organised through the
entry and expansion of organised retail players and retail real
estate developers, new retail markets are emerging across cities.
Organised retailers are not only setting up shop in traditional
retail markets, but are also seeking new emerging markets inorder to widen their buyer base. Further, unorganised retailers
are shifting from established retail markets as they are being
squeezed out by the organised retailers who pay higher rents.
Initially in the first 2 to 3 years, new main streets are dominated
by mom and pop stores, local tailoring, hardware, home
improvement, F&B and other stores as rents and capital values are
cheaper and organised players are not willing to take on the high
risks associated with these emerging new markets. However, as
these markets gain traction in terms of increasing consumer base
and availability of quality real estate options, organised players
(usually in the mid segment) start setting up shop.
The final yardstick of success of any retail outlet is the
profitability that retailers can expect in the retail destination.
Most brands have a set format for a retail store that includes the
size of the store, expected frontage, building quality, store
interiors (design and materials), etc. Thus, the fit-out costs are
standardized over all locations and the initial capital expenditure
is in similar range across the cities for a particular brand.As the
product pricing is also same across the country, the profitability of
a store is usually affected by the ratio of the average trading
density or the revenue earned to rent paid. Emerging main streets
are competing with established main streets by offering muchlower rentals and increasing revenue generating footfalls, which
make these locations pretty lucrative for brands.
INCREASING ORGANISED RETAIL
HIGH AVERAGE TRADING DENSITIES
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KEY EMERGING MAIN STREETS
Various market forces guide the development of new main
streets, each of which, witnesses a unique combination of growth
factors and hindrances or bottlenecks. In this section, we have
attempted to outline various market forces, which have shaped
the current retail landscape in the emerging main streets of the
seven cities under study.
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HSR Layout (27th Main)
Located between Hosur Road and Sarjapur Road, two main
arteries of the city, HSR Layout 27th Main Street emerged as a
retail main street due to the residential pockets that have
mushroomed in HSR Layout because of the growth of IT-ITeS
hubs in Electronic City and along the south-eastern part of
Outer Ring Road. The residential catchment for this main street
includes Sarjapur Road, Jakkasandara, Hosur Road and the Outer
Ring Road (ORR) stretch near Sarjapur-ORR Junction. The lack
of malls and retail locations within a 5 kilometre radius and the
presence of a prominent educational institute - the NationalInstitute of Fashion Technology, have also acted as vital catalysts
for the emergence of this location. Further, the proposed metro
connectivity is expected to make this location more attractive in
future.
Sahakar Nagar
Formed as a co-operative housing society for government
employees, Sahakar Nagar today enjoys the benefit of being the
sole retail destination between Hebbal located about 3 kms away
and the Bengaluru International Airport (27 kms away). Since
limited retail space is present in northern Bengaluru, Sahakar
Nagar also caters to a large cosmopolitan population from
Hebbal, Yelahanka, Thanisandara Road, Jakkur and Jalahalli. The
demographic profile of the catchment consists of not only
employees from IT-ITeS industries in North Bengaluru, but also
from large number of employees working at the internationalairport. The anticipated malls in Thanisandra Road and Yelahanka
will further boost the retail activity in north Bengaluru.
Under construction
Metro Rail network
Road Network Emerging Retail Main
Streets Catchment
Emerging Retail
Submarkets
Established Retail
Submarkets
Operational Mall
BENGALURU
OldM
adras
Road
KamanahalliMainRoad
Old Airport Road
SarjapurRoad
HosurR
oad
KanakpuraR
oad
Mysor
eRoad
Magadi Road
TumkurRoad
Be
llary
Roa
d
MG Road
NEO Mall
Virginia Mall
Forum
Shantiniketan Mall
Brigade Mall
Elements Mall
RMZ Galleria Mall
Vaishnavi Mall
Galaxy Mall
Unitech GardenGalleria Mall
Forum Value Mall
Park Square Mall
Cosmos Mall
TotalMall
Gopalan Mall
Cosmos Mall
Phoenix
Market CityBrigade Orion
Mantri Square The Collection
Mall
The Collection
Mall
Gopalan Mall
Royal Meenakshi Mall
The Forum Mall
Lido Mall
EVA Mall
IMG Road Mall
Marathalli Junction
Central Mall
Total Mall
Kamanahalli Main Road
New Bel Road
Commercial Street
Indiranagar
100ft Road
Koramangala80 ft Road
Jayanagar
4th Block, 11th Main
Sampige Road,
Malleswaram
Vittal Mallya
Road
HSR Layout
Sahakarnagar
Under Construction Mall
NEW RETAILFRONTIERS
Completed
Metro Rail network
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Under construction
Metro Rail network
Road Network
CHENNAI
Emerging Retail Main
Streets Catchment
Chennai Suburban
Rail Network
Operational Mall Emerging Retail
Submarkets
Established Retail
Submarkets
PS Grand Mall
PhoenixMarket City
Coromandel Plaza
Chandra MallPrestige Forum
Mall
Ampa Skywalk
New BergamoMall
Spencers Plaza
Express Avenue Mall
Ramee Mall
City Center
ECR
Ambattur(MTHRD)
GrandS
outhern
TrunkRo
ad
NewAvadiRoad
Rajiv
Gandh
iSalai
ECR
Purusvakam High Road
Adyar Main Road
Usman RoadSouth
CathedralRoad
PondyBazar
Usman Road NorthKhadar Nawaz Khan Road
Nungambakkam High Road
Velachery
ndAnna Nagar 2 Avenue
Ambattur (MTH Road)
MTH Road, passing through Ambattur before merging with the
Chennai Bypass, has witnessed the establishment of several retail
outlets in the last 2-3 years due to its proximity to densely
populated residential neighbourhoods of Mogappair,Anna Nagar
West, Nolumbur and Padi and its proximity to the Ambattur
Industrial Estate. With many IT parks and commercial buildings
coming up, the industrial estate has transformed over the last few
years and is attracting mammoth real estate development in the
vicinity. Planned infrastructure upgrades such as widening of theMTH Road stretch in Ambattur can further provide an impetus
for retail stores seeking a first movers advantage in this emerging
main street.
ECR
The interplay of two major forces easy accessibility and
increasing urban sprawl gave momentum to retailers presence on
the East Coast Road in the stretch from Thiruvanmiyur to
Neelangarai, transforming it into an upcoming retail main street.
This main street is close to both Adyar and Rajiv Gandhi Salai and
is easily accessible by road. The presence of the Thiruvanmiyur bus
terminus and the Thiruvanmiyur MRTS Station attracts sizeable
shopping population from other suburbs such as Velachery. ECR
caters to the large residential catchment of Kottivakkam,Pallavakkam, Thiruvanmiyur and some neighbourhoods of Besant
Nagar and Rajiv Gandhi Salai (up to Shollinganallur).
Poonamall
eeHighRo
ad
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Dwarka (Ashirwad Chowk)
The planned development of Dwarka as a satellite city in South-
west Delhi, located in close proximity to both Delhi and
Gurgaon, has been the driving force behind the emergence of
Ashirwad Chowk as a retail main street. Good quality
infrastructure in the form of wide roads, metro stations,
educational institutions and several branded hotel chains have
transformed Dwarka into a cosmopolitan hub. Since Ashirwad
Chowk is located at the intersection of 6 streets, connecting
Sectors 4, 5, 11 and 12, it also witnesses footfalls from nearby
Sectors such as Sectors 6, 9, 10 and 13 amongst others.
Sohna Road
With its massive IT clusters and increasing population, Gurgaon is
expanding horizontally. Sohna Road, a burgeoning residential
location for mainly the mid-income population is witnessing rapid
development of new residential projects, with nearly 10,000 units
currently under construction to meet the growing housing
demands. Supporting infrastructure such as schools and hospitals
between Netaji Subhash Chandra Chowk and the Golf Course
Extension Road crossing have made this a sought after residential
area. Due to lower rentals on this main street compared to
other prominent retail destinations in Gurgaon, this main street
has attracted many retailers belonging to apparels, fitness and F&B
segments. Reconstruction and widening of this stretch have also
stimulated the retail growth on this main street.
Under construction
Metro Rail network
Road Network Emerging Retail Main
Streets Catchment
Existing Metro
Rail network
Operational Mall Emerging Retail
Submarkets
Established Retail
Submarkets
DELHI-NCR
Ashirwad Chowk
Sohna Road
AthenaMall
Appu Ghar
Pratham
Lok
Mall
DLF
Galleria
Karol Bagh
Gurgaon
Delhi
IGI Airport
Janakpuri
Sector 14
Basant
Mehrauli-Gu
rgaonRoad
Gurgaon-FaridabadRoad
Go
lfCourseR
oad
NH
-8
Dlf Emporio
DLF Promenade
DLF Ambience
DT CityCentre
Gold Souk Mall
MGFMetropolitan
Sahara Mall
Star Mall
Omaxe Celebration Mall Raheja Mall
Omaxe City Centre
Gurgaon Omaxe Mall
Jmd Galleria
DLF Mega Mall
7
Under Construction Mall
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Chanda Nagar
The development of dense residential clusters such as the BHEL
Township, Miyapur and Medinigud around Chanda Nagar is the
driving force behind the emergence of retail establishments on
this main street. Social infrastructure such as hospitals and
schools located in the vicinity of Chanda Nagar render support
to the local population and help in the creation of this retail hub.
Going forward, the planned Miyapur Metro depot will boost the
growth of Chanda Nagar main street. Further, two new malls in
the next two years in Chanda Nagar may boost this location as a
major retail hub.
Kothapet
Kothapet has emerged an organized retail stretch in the last 2-3
years due to its proximity to Dilsukh Nagar, which is one of the
oldest commercial hubs. Traditionally popular as a farmers market,
the arrival of companies such as Aditya Birla's More, coupled with
domestic apparels retailers, local department stores and
supermarkets has transformed this extension of Dilsukh Nagar
into a sought after retail location. Kothapet caters to the
residential populations of Saroor Nagar, Green Hills,
Chaitanyapuri and Gayatripuram Colony amongst others. Due to
the proposed metro connectivity, the Kothapet retail main street
will develop further drawing more footfalls.
Under construction
Metro Rail network
Road Network Emerging Retail Main
Streets Catchment
Emerging Retail
Submarkets
Established Retail
Submarkets
Operational Mall
HYDERABAD
Hitech City
Kothapet
GSM Infra Mall
Maruthi Mall
City Capital Mall
DSL Mall
NSL Centrum Mall
Manjeera Mall
Inorbit Mall
Forum Sujana Mall
GVK MallCity Capital Mall
Hyderabad Central
MPM Bonsai MallPrasads Mall
Chanda Nagar
MumbaiHighway
NewMumbaiRoad
ZooPa
rkMain
Road
DilsukhnagarMainRoad
Dilsukhnagar
M.G. Road
Kukatpally
Madhapur
Uppal
Banjara Hills
Jubilee Hills S.P. Road/ Begumpet
Abids
Raj Bhavan Road
Himayatnagar
A.S. Rao Nagar
Punjagutta Ameerpet
Hyderabad Road
Warangal-
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Under Construction Mall
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Diamond Harbour Road
Located in the southern suburbs of Kolkata, Diamond Harbour
Road (Behala to Joka stretch) is fast emerging into a retail main
street in the wake of increasing residential penetration. Due to
the development of mini townships and high rises in the nearby
localities of Behala, New Alipore and Mahesthala, this retail main
street emerged to serve the needs of the increasing residential
activity. Development of residential complexes near industrial
areas such as Taratala also serve as a catchment for this main
street where apparels, jewellery, electronics and F&B segments
have witnessed good demand from consumers. The ongoing
construction of the metro corridor (Joka-BBD Bagh) is the major
infrastructural work that can impact this location.
NSC Bose Road
Situated in the middle of two of the busiest localities in Kolkata
Tollygunge (South) and Garia (South Peripheral), NSC Bose Road
is one of the busiest roads in the city. Organized retail
establishments have started mushrooming in the vicinity as it
connects two major transport hubs. While Tollygunge serves as
the terminal for several transport services such as trams, buses,
and metro, Garia has a couple of bus terminuses serving major
routes in the city. Enhanced mobility by these transport nodes is
the major driving force, which has propelled retailers to explore
NSC Bose Road as a retail avenue. Old residential colonies along
NSC Bose Road, along with high density residential pockets of
Tollygunge and Garia are the residential catchments for this main
street. The infusion of large quantity of good quality retail space,
which is currently under construction will further provide a fillip
to this location.
Under construction
Metro Rail network
Road Network Emerging Retail Main
Streets Catchment
Kolkata Suburban
Rail Network
Operational Mall Emerging Retail
Submarkets
Established Retail
Submarkets
KOLKATA
Belghoria Expressway
Park Circus Connector
Rashbehari Connector
Prince Anwar Shah
Connector
City Centre 2
City Centre
Acropolis
Quest Mall
South City Mall
Forum Mall
Diamond HarbourRoad
Gariahat
Park Street
VIP Road
Airport
Genexx Valley Mall
Mani Square Mall
NSCBose Road
Camac Street
Theatre Road
Elgin Road
S.P. Mukherhee
Road
Kankurgachi
Axis Mall
Metropolis Mall
Lake Mall
Diamond Plaza
Avani Riverside Mall
Forum Rangoli Mall
EM
Bypass
GT
Road
VidyasagarSetu
KonaExpressway
DH
Road
9
Under Construction Mall
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Under construction
Mono Rail
Road Network Emerging Retail Main
Streets Catchment
Mumbai Suburban
Rail Network
Operational Mall Emerging Retail
Submarkets
Established Retail
Submarkets
MUMBAI
Colaba
Fort
Kemps Corner
Lower Parel
Bandra
Chembur
Vashi
Ghatkopar
Andheri
Malad Goregaon
Borivali
Thane
Mulund
Airoli
Vasai
Phoenix Mills
R City Mall
Nirmal
Lifestyle
Inorbit Vashi
Raghuleela Mall
CentreOne
Magnet
Mall
Oberoi Mall
Inorbit
Malad
Infiniti Ii
R Mall
Viviana Mall
Korum Mall
Dattani Square Mall
KurlaPhoenix
Market City
Infiniti
Seawoods Grand Central
Mum
baiAhm
edabadHighw
ay
WesternExpressHighway
EasternExpress Highway
Easte
rnFr
eeway
SionPanvelHighway
Chhatrapati ShivajiInternational Airport
Navi Mumbai InternationalAirport (Proposed)
Bhandup
JVLR
Completed Mono Rail
2014
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Under Construction Mall
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Ambadi Road
Due to its proximity to the Western suburbs and lower
residential prices compared to other Mumbai suburbs, Vasai has
emerged as a favourable residential market for the mid-income
earning population. To serve the needs of the large population
residing in Vasai, Ambadi Road has emerged as a preferred retail
destination. It is close to the suburban railway station, which
provides easy access to this main street. Due to the proximity of
the railway station and high density residential catchment,
Ambadi Road holds a lot of potential.
Airoli (Sectors 4 & 8)
The growth of Airoli as an IT-ITeS hub has had a cascading effect
on main street retail of Sectors 4 and 8 in recent years. The
sprawling IT parks and IT SEZs, such as Mindspace on the Thane-
Belapur Road (near Airoli Railway Station) have led to a large
floating population visiting the location; in turn, this has given a
boost to main street retail. The office space in Airoli and Thane-
Belapur Road is expected to increase by 50% of the current stock
in the next two years, which will give a fillip to main street retail
in Sectors 4 and 8 where enquiries from F&B, electronics and
apparels segments is high. Sectors 6, 9, 14 and 16 in Airoli are the
residential areas near this main street, which consist primarily of a
young working population.
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Pimple Saudagar
The metamorphosis of Pimple Saudagar as a self- sustaining
suburb of Pune with increasing retail activity is attributed to the
increasing population of young IT-ITeS professionals employed in
the IT hub of Hinjewadi. The absence of other established main
streets near Pimple Saudagar has proved to be a boon for
retailers looking to set shop here as the nearest main street is at
least 6 kms away from this location.An upcoming shopping mall
in the location will add to this retail markets growth in the near
future.
Kharadi
Kharadi has emerged as a new commercial office hub and retail
main street due to its proximity to upmarket residential
addresses in Pune. Located adjacent to established micro markets
such as Kalyani Nagar and Viman Nagar, where residential real
estate is quite expensive, Kharadi is considered to be suitable for
the mid-income population. Further, the IT-ITeS focused Special
Economic Zones have led to its transformation as a fast growing
locality. The presence of as many as four shopping malls within a
distance of 2-3 kms have already set the tone for organised retail
in this location.
Road Network Emerging Retail Main
Streets CatchmentOperational Mall
Emerging Retail
Submarkets
Established Retail
Submarkets
PUNE
2014
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East Court
Inorbit Mall
Phoenix MarketCity
Mariplex
Koregaon Park Plaza
Amanora TownCentre
Seasons Mall
Nucleus Mall
SGS Mall
Kumar Pacific
Spot 18 Mall
Westend Mall
Blueridge Mall
Xion Mall
Aundh
F.C. Road
J.M. Road
M.G. Road
Bund Garden Road
Koregaon Park
Ishanya
Pimple Saudagar
Kharadi
Prime Mall
Old Mumbai PuneHighway - PCMC
KakadeCenterPort
AlandiR
oad
OldMumbai-p
uneH
ighway
Pune-nashikHighway
MumbaiP
uneByp
assRoad(n
h4)
UniversityR
oad
Mulshi
Road
KarveR
oad
PoudRoad
Satara
Road
Pune-solapurHighway
NagarR
oad
Under Construction Mall
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City Emerging Main Street Urban Sprawl Accessibility Proximity to Business Availability of Quality
District Retail Spaces
Bengaluru HSR Layout (27th Main)
Sahakar Nagar
Chennai Ambattur (MTH Road)
ECR
Delhi-NCR Dwarka (Ashirwad Chowk)
Sohna Road
Hyderabad Chanda Nagar
Kothapet
Kolkata Diamond Harbour Road
NSC Bose Road
Mumbai Ambadi Road
Airoli (Sectors 4 & 8)
Pune Pimple Saudagar
Kharadi
Demand Drivers for the Emergence of New Main Streets
Strongest Driving Force Stronger Driving Force Strong Driving Force Weak Driving Force
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ANALYSING RETAIL DYNAMICS
IN EMERGING MAIN STREETS
PRESENCE OF DOMESTIC AND FOREIGN BRANDS
Emerging main streets across the seven major Indian cities have
witnessed a dominance of domestic brands as compared to
foreign brands.Ashirwad Chowk in Delhi NCR, NSC Bose Roadin Kolkata and HSR Layout and Sahakar Nagar in Bengaluru have
recorded the highest share of foreign brands, each recording
more than 20% of total space absorbed by foreign brands. The
presence of foreign brands is significantly lower in all other
emerging main streets attributed to factors such as demography,
disposable income, easy accessibility and quality of retail space
available that are considered unfavourable by foreign retailers but
are not a deterrent to domestic ones.
20% 23% 17%
7%
23%
8% 10%
1%
16%
29%
11% 11% 7%11%
80% 77%83%
93%
77%
92% 90%
99%
84%
71%
89% 89% 93% 89%
HSRLayou
t(27thMain)
S
ahakarNagar
ECR
Ambattur
(MTHR
oad)
AshirwadCh
owk,
Dwarka
SohnaRoad
C
handaNagar
Kothapet
DiamondH
arbourRoad
NS
C
BoseRoad
AmbadiRoad
Airoli(S
ectors4&8)
Kharadi
Pim
pleSaudagar
Bengaluru Chennai Delhi-NCR Hyderabad Kolkata Mumbai Pune
Foreign Brands (%) Domestic Brands (%)
Presence of Foreign and Domestic Brands
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Major Brands Present across 14 Emerging Main Streets
15
MUMBAI
PUNE
BENGALURU
DELHI-NCR
KOLKATA
HYDERABAD
CHENNAI
NEW RETAILFRONTIERS
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0%
10%
20%
30%
Apparels &
Footwear
Automobiles F&B Electronics Clinic /
Pharmacy
Home
Improvement
Departmental
Store
Supermarket Mom & Pop
Store
Others Salon & Spa
Ambattur (MTH Road) ECR
0%
10%
20%
30%
40%
Apparels &
Footwear
Automobiles F&B Electronics Clinic /
Pharmacy
Home
Improvement
Departmental
Store
Supermarket Mom & Pop
Store
Others Salon & Spa
HSR Layout (27th Main) Sahakar Nagar
SEGMENT MIX ACROSS EMERGING MAIN STREETS
Emerging main streets across the top seven cities have witnessed
mixed trends. Whilst some streets have emerged as a F&B hub,
others have emerged as apparels and footwear hubs, but almost
all segments are present across all main streets. Apparels and
footwear were noted as the most demanded retail segment and
constituted 24% of the total retail space taken up across cities,
followed by F&B accounting for 16% of the total space taken up.
The above two segments satisfy the basic needs of the residents
and so, in each of these main streets the space take-up of these
segments is the highest.The lowest percentage of space was taken
up retailers in the segments of Clinic / Pharmacy (3%), Salon & Spa
(4%) and Automobile and Mom & Pop stores stood at 6% each.
Except automobiles, most of these segments have small space
requirements and so the entire space take-up is small. Further
scope of each of these segment in each of the 14 emerging main
streets can be gauged through the graphs below:
Percentage Spread of Various Retail Categories (Bengaluru)
Percentage Spread of Various Retail Categories (Chennai)
2014
16
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Chanda Nagar Kothapet
0%
10%
20%
30%
40%
Apparels &
Footwear
Automobiles F&B Electronics Clinic /
Pharmacy
Home
Improvement
Departmental
Store
Supermarket Mom & Pop
Store
Others
0%
10%
20%
30%
40%
50%
Apparels &
Footwear
Automobiles F&B Electronics Clinic / Pharmacy Home
Improvement
Departmental
Store
Supermarket Others
Diamond Harbour Road NSC Bose Road
0%
10%
20%
30%
40%
Apparels &
Footwear
Automobiles F&B Electronics Clinic /
Pharmacy
Home
Improvement
Departmental
Store
Supermarket Mom & Pop
Store
Others Salon & Spa
Dwarka (Ashirwad Chowk) Sohna Road
Percentage Spread of Various Retail Categories (Delhi-NCR)
Percentage Spread of Various Retail Categories (Hyderabad)
Percentage Spread of Various Retail Categories (Kolkata)
17
NEW RETAILFRONTIERS
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0%
10%
20%
30%
40%
50%
Apparels &
Footwear
Automobiles F&B Electronics Clinic / Pharmacy Home
Improvement
Mom & Pop Store Others Salon & Spa
Airoli (Sectors 4 & 8) Ambali Road
0%
10%
20%
30%
Apparels &
Footwear
Automobiles F&B Electronics Clinic /
Pharmacy
Home
Improvement
Departmental
Store
Supermarket Mom & Pop
Store
Others Salon & Spa
Kharadi Pimple Saudagar
Percentage Spread of Various Retail Categories (Mumbai)
Percentage Spread of Various Retail Categories (Pune)
2014
18
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RENTAL MOVEMENT IN NEW EMERGING MAIN STREETS IN LAST 2 YEARS
Emerging main streets typically quote at least 20-30% lower
rentals than established main streets across the cities.All
emerging main streets have witnessed an upswing in rentals in
the past two years as demand for spaces in these locations has
been increasing steadily. Dwarka (Ashirwad Chowk) is the only
emerging retail location to command a notably high rental.
Kothapet in Hyderabad recorded the lowest rentals as well asthe lowest rental upside of 4% in the last two years, mostly due
to high availability of spaces.
Limited availability of good quality retail spaces has led to a steep
rise in rentals over the last 2 years as many mid segment brands
are increasingly expanding to these locations. HSR Layout 27th
Main and Sahakar Nagar in Bengaluru have each witnessed a
robust 70% rental growth since 2012; however, the rental growth
has been from a smaller base and hence, these markets are still
attractive. Further, landlords in new main streets are usually more
flexible in terms of deposit and lease terms, which translates into
better cost-effectiveness for retailers even if rentals increase in
future on account of high demand.
0
10
20
30
40
50
60
70
80
0
100
200
300
400
500
600
HSRLayout(27thMain)
SahakarNagar
Ambattur(MTHR
oad)
ECR
Dwarka(AshirwadChowk)
SohnaRoad
ChandaNagar
Kothapet
DiamondHarbourRoad
NSC
BoseRoad
Airoli(Sectors4&8)
AmbadiRoad
Kharadi
PimpleSaudagar
Bengaluru Chennai Delhi-NCR Hyderabad Kolkata Mumbai Pune
Rental
Growth(%)
Rents(IN
R/sf)
Rent (INR/sf) % Rental Growth (in 2 years)
Main Street Rentals and their Growth in last 2 years
19
NEW RETAILFRONTIERS
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OUTLOOK FOR THESE
EMERGING MAIN STREETS
Until two years ago, the allowance of FDI in single-brand retail
and multi-brand retail were two major policies that boosted
growth of the retail sector and also demand for quality real
estate spaces. However, the relatively slower economic growth of
the country over the last two years (2012-2014) resulted in
sluggish demand in the retail sector and also led to deferment of
malls and other retail spaces. The retail sector as such has not
witnessed any policy announcements to boost its growth. Whilst
there is huge potential for organized retail in India, retailers are
awaiting conducive conditions to expand their operations.
Macroeconomic conditions need to improve further to
encourage consumer spending and the Government needs to
address the uncertainty that exists with respect to its policy
stand on FDI in multi-brand retail.The overall infrastructure to
support retail trade such as transportation and logistics too
needs to improve substantially for the sector to graduate to its
next phase of growth.
Emerging main streets have the potential to help retailers meet
some of their growth targets.As consumers are forced to move
to new suburbs and peripheral locations, they will find it
increasingly difficult to commute to the established retail hubs.
Given the time constraints in the busy modern life, convenience
and ease of shopping is fast becoming the single most important
factor for a consumer.This is also a major contributor to the
fast-paced growth of the e-retail market in India, which will not
however,impact the growth potential of brick and mortar retail
businesses.
Meanwhile, organised retailers have been focussing on quality
spaces only, which has witnessed inconsistent supply since thepast two years, thus limiting their growth strategies.The
emergence of new main streets not only can help retailers tap a
large consumer base that now resides in new suburbs and
peripheral areas but also create a semi-urban consumer base.
The semi-urban consumers are increasingly becoming more
demanding in their shopping choices and showing a higher
propensity to spend than urban consumers.
Our report has already highlighted some of the most prominent
emerging main streets in India.These have already gained
substantial traction and retailers are increasingly exploring
options in them. However, these still have high growth potential
and we believe that this is the right time for other retailers to
actively consider these and other emerging locations for their
own future growth.
Cities New Emerging Main Streets Potential (Growth Factors)
Bengaluru HSR Layout (27th Main) Proximity to IT-ITeS hubs on both sides; prolific residential development and future
metro connectivity
Sahakar Nagar Lack of retail avenues in the vicinity and densely populated neighbourhoods
Chennai Ambattur (MTH Road) Proximity to high population density residential catchments and burgeoning IT-ITeS hub
ECR Strategically located between two major commercial and residential hubs
Delhi-NCR Dwarka (Ashirwad Chowk) Infrastructure, broad roads and favourable population growth
Sohna Road Swelling residential catchment
Hyderabad Chanda Nagar Good connectivity and social infrastructure; increasing residential clusters
Kothapet Adjacent to old commercial hub
Kolkata Diamond Harbour Road Development of townships; increased residential penetration
NSC Bose Road Situated between two busy transport hubs; easy accessibility and ample good
quality retail space under construction
Mumbai Ambadi Road Vasai an established mid-income residential location
Airoli (Sectors 4 & 8) Growing concentration of IT-ITeS Parks in Airoli
Pune Pimple Saudagar Increasing population and lack of other malls or main streets
Kharadi High residential catchment area
Potential of New Emerging Main Streets
2014
20
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For more information on C&W's Retail
Services, contact:
Sanjay Dutt
Executive Managing Director, South Asia
Cushman & Wakefield
+91 22 6657 5555
For more information about C&W
Research, contact:
Siddhart Goel
Director, Research
+91 22 6657 5555
Cushman & Wakefield is the world's largest privately-held commercial real estate services firm. The company advises and represents clients on all aspects of
property occupancy and investment, and has established a preeminent position in the world's major markets, as evidenced by its frequent involvement in
many of the most significant property leases, sales and management assignments. Founded in 1917, it has approximately 250 offices in 60 countries,
employing more than 16,000 professionals. It offers a complete range of services for all property types, including leasing, sales and acquisitions, equity, debt
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www.cushmanwakefield.com/knowledge
Authors of the report:
Siddhart Goel
Director, Research
Divya Grover
Deputy Manager
Disclaimer
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Cushman & Wakefield accepts no responsibility if this should prove not to be the case. No warranty or representation, express or implied, is made to the
accuracy or completeness of the information contained herein, and same is submitted subject to errors, omissions, change of price, rental or other
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Associate
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Director, Marketing & Communications
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